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“Public opinion will beat any amount of campaign contributions,” Frank said. “There are natural networks of people who earn their living in a certain way and are distributed throughout the nation – agents, realtors, credit unions.”
Frank said he did see a need for the Federal Insurance Office that the financial reform act will create.
“Because insurance has been regulated as the state level, the federal government doesn’t know very much about it,” he explained. The Senate’s original bill gave the FIO too-broad powers, but the final version reined that in, Frank noted.
By the time all of the changes in the Wall Street Reform and Consumer Protection Act have been implemented, Frank said, “Regulation of insurance will have changed far less than any other aspect of our financial system.” According to Frank, the bill leaves the vast majority of the insurance regulatory system the way it is, so he questioned why NCOIL members would have any “uncertainty” about the impact of the changes.
The inevitable discussion of the OFC is an effort to accommodate members of the House that are interested, Frank said. He assured the group that the federal government has no interest in ever being in charge of auto insurance, for example.
“People want to be able to drive irresponsibly and not be charged for it,” he remarked.
In addition, Frank commented that the federal government does not have much of a good track record on consumer protection. States have done better, he said.
“When they get to the federal level, people want to make grand, international macroeconomic policy and worrying about the little old lady who thinks she’s been treated badly is considered a diversion,” said Frank. “I have to ride herd on Congress to get them to do that.” In response to an NCOIL member’s question, what to do with premium taxes – which now go entirely to the states – will be a factor for the “ deci-sion-makers” on the OFC discussion to determine.
And on that point, Frank said the audience would have to ask proponents on an OFC what they think about how it should be put together – he would not comment.
■
“There’s a human impulse to shoot the messenger,” Frank concluded.
MONTPELIER, Vt. — The state of Vermont’s captive insurance sector reported a good first half of 2010, licensing 17 new captive insurance companies as the state approaches the 900-license milestone, officials said.
The 17 new captives this year puts Vermont three ahead of last year’s pace of new formations. In 2009, Vermont licensed 39 new captives, its 6th best year in its 29-year history.
This year’s new captive insurance companies include 15 “pure” captives – four of which are special purpose financial captives – and two risk retention groups, according to data released by the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA).
“This is a very encouraging sign at
a time when the national economy’s
outlook is still unknown,” said Sandy
Bigglestone, director of captive insur-
ance at BISHCA. “Quality companies
like Proctor and Gamble; Price Wa-
terhouse Coopers; Crowe Horwath;
and Towers Watson & Co. still see
the value of establishing a captive as
an integral part of their risk manage-
ment regardless of uncertain market
conditions.”
Bigglestone, a 13-year veteran with
the Captive Insurance Division who
recently took over following Peter
Raymond’s June departure, credit-
ed the state’s continued investment
in its regulatory arm and responsive
political institutions for the con-
tinued popularity of Vermont as a
captive domicile.
“At a time when many states are cutting back, we are still improving our processes and enhancing our regulations. In Vermont, applications are still processed in 30 days,” Bigglestone said. “Having a governor and a legislature that understands the importance and needs of the captive industry is critical in that regard.” “Vermont is bucking the trend with a strong first half of the year and it is very encouraging that interest in companies that want to form captives in Vermont continues to be robust,” said Dan Towle, Vermont’s Director of Financial Services. “We’re going to continue our efforts to grow Vermont’s captive industry and maintain our lead as the ‘Gold Standard’ of captive domiciles.” Professional services, insurance companies, construction, and health care continue to be growth sectors as shown by the newly formed captives for 2010.
“We have seen a lot of interest by hospital groups seeking a captive for their professional medical liabilities and by smaller and mid-cap companies,” said David Provost, Deputy Commissioner of Captive Insurance. “I expect this trend to continue.” With 895 captive licenses, Vermont is the largest captive insurance domicile in the U.S. and the third largest in the world, with an excess of $77 billion in gross written premium in 2009. 42 of the companies that make up the Fortune 100 and 18 of the companies that make up the Dow 30 have Vermont captives. ■
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